Centre set to cross Rs 80000 cr disinvestment target for first time since FY19 after IDBI Bank stake sale

The government is likely to exceed its budgeted disinvestment and asset monetisation target of Rs 80,000 crore in FY27, crossing the mark for the first time since 2018-19. The proposed Rs 52,878-crore strategic sale of IDBI Bank is expected to take the total proceeds beyond the target.

The government has raised Rs 55,757 crore so far through minority stake sales in nine public sector undertakings (PSUs), including Life Insurance Corporation of India (LIC) and Coal India, the strategic sale of Indian Medicines Pharmaceuticals Corporation Ltd and remittances from SUUTI.

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Including the expected proceeds from IDBI Bank, the total disinvestment receipts would exceed Rs 82,000 crore.

On Wednesday, the Cabinet Committee on Economic Affairs approved Fairfax subsidiary M/s 10955230 Canada Inc. as the strategic buyer for IDBI Bank.

The transaction involves the government's 30.48% stake, valued at about Rs 26,620 crore, and LIC's 30.24% stake, worth around Rs 26,440 crore.

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The proceeds will flow into the government exchequer after the transaction is completed, which is likely before the end of FY27.

The government discontinued setting separate disinvestment targets from the Revised Estimates (RE) for FY24. However, targets continued under Miscellaneous Capital Receipts, which include disinvestment and asset monetisation.

The government budgeted Rs 30,000 crore for FY24, Rs 33,000 crore for FY25, Rs 33,837 crore for FY26 and Rs 80,000 crore for FY27 under this category.

In 2022-23, the government raised Rs 35,294 crore against the revised estimate of Rs 50,000 crore. In 2021-22, receipts stood at Rs 13,534 crore against the revised estimate of Rs 78,000 crore.

In 2020-21, the government raised Rs 32,886 crore against the revised estimate of Rs 32,000 crore. In 2019-20, it collected Rs 50,300 crore against the revised estimate of Rs 65,000 crore.

The last time the government exceeded its disinvestment target was in 2018-19, when it raised Rs 84,972 crore against the budget target of Rs 80,000 crore.